Asked by Destinee Miller on Jul 27, 2024
Verified
Based on the following information: compute (a) inventory turnover; (b) average daily cost of goods sold; and (c) number of days' sales in inventory for the current year. Use a 365-day year. (d) If an inventory turnover of 12 is average for the industry, how is this company doing?
Average Daily Cost
The average amount of expenses incurred in a day, calculated over a specified period.
Inventory Turnover
A ratio indicating how many times a company's inventory is sold and replaced over a certain period, measuring efficiency in managing stock.
Days' Sales
A financial ratio that measures the average time it takes for a company to convert its inventory into sales.
- Analyze and quantify the inventory turnover and the days' sales maintained in inventory.
Verified Answer
Learning Objectives
- Analyze and quantify the inventory turnover and the days' sales maintained in inventory.
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